12/20 Trading Plan - Today's Recap and Thursday Trading Plan

📊 Market Sentiment: Shifting Tides Amidst Volatility

Despite a recent downturn, the market remains in a robust uptrend. The S&P 500 Futures experienced a red day, triggering a sell-off, but the bulls are still in play, awaiting a reclaim of certain resistance levels. Critical for the bulls is the 4740 area; holding above this level could initiate upward momentum. However, a failure to maintain this could signal the start of a downward trend.

🌐 Pre-Market Overview

Asian-Pacific Markets:

• Declines across most indices, with Hang Seng and Nikkei showing notable drops, indicating regional market uncertainty.

European Markets:

• A mixed scenario with FTSE 100 gaining, while DAX shows minor losses, reflecting varied investor sentiment in Europe.

Commodities:

• Oil and natural gas prices are down, indicating potential shifts in energy market dynamics.

• Gold and silver show minor declines amidst a volatile trading environment.

Currencies:

• The Euro and Pound are slightly up against the USD, while the Yen shows a noticeable decline, hinting at currency market fluctuations.

U.S. Treasurys:

• Minor changes in yields across various maturities, signaling a stable bond market environment.

U.S. Indexes:

• Russell 2000 and other major indexes like NASDAQ 100 and NYSE experienced declines, pointing towards a cautious stance among U.S. investors.

Sector Movements:

• Technology and consumer staples sectors are down, reflecting broader market apprehensions.

🌏 Major Global Catalysts

1. Political Developments: Michigan considers removing Trump from the 2024 ballot, similar to actions in California, while Republicans consider strategies to disqualify Biden from ballots. This points to heightened political maneuvering ahead of the 2024 elections.

2. Media and Entertainment: Warner Bros Discovery is potentially eyeing a mega-merger with Paramount, shaking up the entertainment industry. Additionally, Mediaite has declared its list of the most influential figures in media, including notable names like Hannity, Morning Joe, Megyn Kelly, and Drudge.

3. International Tensions: Putin escalates military pressure, threatening to invade EU countries and expecting Western support for Kyiv to dwindle. In Asia, Chinese President Xi Jinping warns President Biden of his intention to take Taiwan by any means necessary, raising global security concerns.

4. Health and Society: A study warns of a looming 'Pandemic of Inactivity,' potentially the next global health crisis. Meanwhile, the concept of 'sick shaming' leading to overmedication is gaining attention, and there are discussions about whether the USA is in a 'silent depression.'

5. Technology and Science: Developments in tech include scientists creating a vaccine to lower cholesterol and the use of AI to predict life expectancy with chilling accuracy. Additionally, reports reveal that Twitter assisted the Pentagon in a covert online propaganda campaign.

📷 Snapshot

Daily

Daily Data Sentiment Analysis:

• EMA 9, 21, 55: Indicating a bullish sentiment with closing prices above these EMAs.

• Overall Sentiment: Bullish.

4-Hour

4-Hour Data Sentiment Analysis:

• EMA 9, 21, 55: 9 and 21 showing a bearish trend while sitting above the 55.

• Overall Sentiment: Neutral to Bearish

📉 Support Levels

• Major: Watch for 4748, 4740-45, 4734, 4730, and 4724 for immediate support. Other crucial levels include 4715, 4705-08, 4698, 4690, 4684, and 4678.

• Minor: Key minor support levels to monitor include 4669, 4660-63, 4656-58, 4647, 4644, 4634, 4626, 4618-20, and 4613.

📈 Resistance Levels

• Major: Resistance levels to keep an eye on are 4756, 4766, 4772, 4781, 4788, 4797-95, 4810-12, 4820, 4826-29, 4838, 4853, 4860, 4868, 4875, 4882-86, 4903, 4913, 4924, 4933, 4946, 4952, 4962, 4976, 4990, 4497, 5006.

📝 Trading Plan

• Bull Case Analysis:

  • Current Sentiment: Despite recent selling, the market's strong uptrend persists. The ES (S&P 500 futures) has demonstrated resilience, but now requires reclaiming key resistances to initiate upward movement.

  • Key Strategy: Focus on key support levels like 4740-45 for long positions, with a cautious approach. It's crucial not to chase but wait for a test and acceptance of these levels.

  • Upside Targets: If 4740-45 holds, there's potential for a bounce to 4767, and further to 4788. A major move upwards requires reclaiming the 4810-12 area.

  • Risk Consideration: Be aware of the shift in market dynamics; while bullish sentiment is strong, the recent sell-off introduces new variables.

  Bear Case Analysis:

  • Market Vulnerability: The market is at a pivotal point; a failure to hold 4740 could signal the start of a downward trend.

  • Critical Levels: Pay close attention to the 4740-45 range. A breakdown below this could shift the market sentiment to bearish.

  • Short Entry Points: In case of weakness, consider short positions with a trigger around 4736, ensuring disciplined trading without chasing.

  • Downside Targets: If the bearish scenario plays out, subsequent support levels at 4715 and 4705-08 become relevant for profit-taking.

  Overall Outlook:

  • Bullish Trend Continuation: The market might continue its bullish trend if 4740-45 holds, but traders need to stay alert for any shifts.

  • Key Levels to Watch: Critical supports at 4740-45, and resistances at 4767 and 4788 will be crucial in determining the market's direction.

  • Resistance Testing: If the market maintains its bullish stance, higher resistance levels could be tested.

  • Risk Awareness: The market is more volatile with expanded bi-directional action expected. Traders should remain vigilant.

  • Strategy Adaptability: Be prepared to adapt strategies based on the market's response at these pivotal levels.

  Tomorrow’s Outlook:

  • Market Dynamics: The focus will be on whether 4740-45 holds for a potential bounce, or if it fails, shifting the attention to lower support levels like 4715 and 4705-08.

  • Profit Strategy: Aim to take points level to level, with a clear plan for both bullish and bearish scenarios.

Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision.